Stocks end higher ahead of job report

By Christopher Wang
Associated Press

NEW YORK » Mild economic data gave Wall Street a moderate gain yesterday as stocks survived a round of profit-taking ahead of the Labor Department's June employment report. A favorable court ruling for Altria Group Inc. lifted the Dow Jones industrials.

The market got an initial boost from economic and retail sales data that fed optimism about an end to the Federal Reserve's string of interest rate hikes. But traders were already looking ahead to today's employment report -- widely seen as a key indicator of the economy's health -- prompting some to hedge their bets and lock in profits.

With the Fed recently signaling that it could be done raising rates, upcoming economic data and corporate earnings will be critical for stocks. In today's jobs report, numbers too far above or below expectations could reignite worries about inflation and economic growth, said Ken Tower, chief market strategist for Schwab's CyberTrader.

"It's really a fine line," Tower said. "Too much good news fires up this inflation fear and suggests the Fed will have to keep raising rates. Too much of a slowdown threatens profits."

Bonds rose, with the yield on the 10-year Treasury note dropping to 5.18 percent from 5.22 percent late Wednesday. The U.S. dollar fell against the Japanese yen, and gold prices edged up to about $635 an ounce.

Oil futures steadied after nervousness about tensions with North Korea and gasoline supplies propelled prices to a new intraday high Wednesday. Although a government report yesterday showed shrinking crude reserves, inventories of refined products increased. A barrel of light crude lost 5 cents to $75.14 on the New York Mercantile Exchange.

First-time applications for jobless benefits slipped by 2,000 to 313,000 last week, the Labor Department said. Fewer average claims in June suggested a possible rebound in monthly job growth, the department noted.